Last Updated 10:00AM EST
Stock indices are in the red 30 minutes into today’s trading session. As of 10:00 a.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are down 0.3%, 0.2%, and 0.2%, respectively. On Thursday, the Department of Labor released its Initial Jobless Claims report, which came in better than expected.
In the past week, 222,000 people filed for unemployment insurance for the first time. Expectations were for 240,000 individuals.
When using the four-week average, initial jobless claims were 233,500, down from last week’s reading of 240,500. It’s worth noting that this figure has been trending downwards since the middle of August 2022.
In addition, Continuing Jobless Claims, which measures the number of unemployed people who qualify for unemployment insurance, came in at 1.473 million, worse than the forecast of 1.435 million and higher than last week’s reading of 1.437 million.
Continuing Jobless Claims are currently sitting near their lowest levels since 1970. Relatively speaking, this suggests that individuals aren’t struggling to find other jobs after being laid off.
However, this figure has been on an overall uptrend since the beginning of June. It will be interesting to see if this trend continues as interest rates rise while economic growth continues to slow down.
Pre-Market Update
Stock futures dipped early Thursday morning as Wall Street continued to worry about an economic slowdown amid multiple interest rate increases amid positive economic updates.
Futures on the Dow Jones Industrial Average (DJIA) inched 0.02% lower, while those on the S&P 500 (SPX) lost 0.03%, as of 4.28 a.m. EST, Thursday. Meanwhile, the Nasdaq 100 (NDX) futures remained 0.01% below parity.
What Happened on Wednesday?
On Wednesday, the stock market rallied in a strong rebound, leading the Nasdaq Composite to break out of a week-long losing streak. The S&P500, the Dow, and the Nasdaq 100 ended 1.83%, 1.4%, and 2.07% higher, respectively.
Wednesday’s rally might have been a result of the market realizing that the economy is strong enough to handle a tighter market policy. Experts believe that for the past few weeks, investors were struggling to find ground in the stock market. Any positive economic data would mean more motivation for the Fed to continue being hawkish, and would send investors running for safer investment instruments.
Moreover, bond yields also eased, with the yield on the 10-year Treasury note declining to 3.264% from 3.339% the day before. As bond yields move inversely with stock prices, a drop in yields took some pressure off stock prices as well.
Moreover, there was a significant decline in oil prices as well, which buoyed investors’ sentiments. International benchmark Brent crude tumbled 5.2% to $88 per barrel.
What Awaits Investors on Thursday
The weekly jobless claims report is due out on Thursday morning, which will give us more insight into the unemployment scenario of the U.S. A Dow Jones survey reveals that the consensus of responding economists expects the number of initial jobless claims to have jumped slightly to 235,000 this week, from previous week’s 232,000.
